ABSTRACT
This chapter examines the ideas and insights emerging from the Economic Geography and International Business literatures on the strategic fit and embeddedness of multinationals, their subsidiaries and their affiliates in host economies. While the core material is mainly evident in the International Business and Economic Geography, the relevant literature also spans various different disciplines and draws insights from quite different fields, including sociology, political science, management science, urban studies, strategy and economics. However, the locational setting of the multinational subsidiary turns out to be the context in which many different influences and dimensions are drawn together in a manner which heavily shapes corporate decision-making. These issues are discussed here from various perspectives, with a central organising framework of Economic Geography underpinning each. The rest of the chapter is organised as follows: the next section reviews the concepts and definitions linking the multinational to its location or place; then we examine the empirical evidence on embeddedness and strategic fit, followed by a discussion on the dimensions of distance, as they pertain to the Economic Geography of multinational investment decisions. The final section provides some brief conclusions.
